Monday, September 29, 2008

The Nature of Politics (part 2)

In part 1 I wrote about the beginning of my enlightenment about politics. Here I will explain my philosophy in a little more detail.

In the end, politics is about gaining power and exercising authority over others. Many that become particularly adept at it are simply playing a game. The desired result seems to justify the tactics, even if an honest assessment of those tactics leaves one feeling ‘dirty.’ Moreover, it’s often a long game where small actions are taken in the hope of producing some future advantage, or where short-term losses are sometimes accepted as part of a long-term strategy to achieve larger goals.

With the passage of years, I have become more jaded — and perhaps even cynical — about politics in general. While there are sometimes virtuous players involved, the basic nature of politics in every political system throughout history remains essentially the same. And virtue is a term that can seldom be appropriately applied to it. Indeed, politics seems to stand in stark contrast to human freedom. It is only in rare fits — usually against the will of established power holders — that any political system increases freedom.

Many of our Founders understood the basic nature of politics. They worked to design a system that pits the interests of competing groups against each other in the hope of keeping factions in check and maintaining some semblance of balance. They never expected that politics would somehow transform into a bastion of virtue, as various people throughout the history of this nation have hoped.

While politics exist in every organization of any kind, the most significant check on political power is the availability of other options. If I find the political climate at my employer unacceptable, I am free to seek employment elsewhere. When alternatives are unavailable or options become limited, political machinations increase and reduce human freedom. For this reason, healthy competition is a cause that should be championed.

Options are naturally limited when it comes to geopolitical entities. Governments have arrogated to themselves the ability to control the most minute detail of the lives of their residents. If I dislike the political climate in my city enough, I am free to move elsewhere. The same with county and state politics. And people do so choose, frequently as the result of tax structures. People even do this with nations, but not so much in the USA. Many people simply live with what they have because they find the (monetary and/or social) cost of moving to be too high.

We can see that while various political factions may bicker about peripheral points, there is often general consensus about the most significant points, regardless of which faction is in charge. This is because politicians tend to respond to the incentives in the political system in which they operate, acting mainly in their own self interests rather than in the interests of their constituents. These interests sometimes happily coincide, but often they do not.

Which faction is on top at any given moment is far less important than the overall culture of the political system in which the various politicians find themselves and the amount of control the system can exert. Since politics — especially when it comes to the professional level — is inherently a dirty business, individuals are best served when strict limitations are placed on how much control the system may have over the lives of people.

Michael Barone writes, “You can sum up much of 20th-century history by saying that in the 1930s Americans decided that markets didn’t work and government did, and that in the 1970s Americans decided that government didn’t work and markets did.”

Barone opines that due to voters’ attention to recent history and ignorance of long-term history, we could be on the verge of once again significantly increasing government control over the economy and over our individual lives.

I agree with Barone that this would be the wrong direction. But it seems to me that we are headed that direction right now regardless of which faction has power. We will likely need to learn a bitter lesson before the pendulum swings back the other way. I could be an old man by then.

The Nature of Politics (part 1)

When I served as a chapter adviser in the Order of the Arrow (a fraternal Boy Scout service organization) I worked hard to get some of the adults to transition some of their authority to the elected youth leaders.

One of the key points of the OA is to develop youth leaders. As a boy, I had served as chapter chief (district level), lodge chief (council level), and section chief (part of an area). No doubt, it’s the adults that have the institutional memory and that provide the continuity for carrying out the program. But the program is mainly designed for the youth. Adults are to serve in support positions.

For the adults involved this can be challenging. Handing over the program to inexperienced youth can both decrease the adult volunteer’s level of enjoyment and increase the amount of work. It is essential to remember that the key purpose for being involved in the first place is to serve others.

The boys in the chapter once elected a young man to serve as chief that was very popular but was less dedicated than others. He expected the position because of his personality, not his performance. In a true example of the Peter Principle, this young man went on to become lodge chief. But I’m not particularly proud of the way it happened.

This boy came to me along with another of my chapter officers. They had decided that they wanted to run for lodge offices. The most powerful positions in our lodge at the time were chief and secretary. Having an understanding of the political lay of the situation, I suggested that they approach two other well liked, hard working young men that were from different parts of the lodge to fill the vice chief and treasurer positions. This would help shore up regional support. I suggested that they run a campaign as a team and I showed them how they could do this.

The two other boys accepted. The lodge had never seen ‘party’ politicking like that during lodge leadership elections before, so it was not difficult for the four boys to beat their opponents. But the results were less than optimal.

My lazy chapter chief became the lodge chief. He was popular (at least at first), but he shunted much of the actual work off to the other officers. Moreover, everything in the lodge became much more political. There was a general increase in contention about getting things done the way different factions wanted them done as opposed to actually accomplishing the mission of the order.

As these boys’ one-year term wore on, members of the lodge increasingly looked forward to a change in leadership. About that time I was approached by a couple of other boys about running an entire team for lodge leadership. I staunchly refused to help and advised against it. Open elections seemed to produce a better overall result.

A couple of years later, I had a chapter chief that was a very pure and genuine soul. Since adults don’t speak at executive meetings, I at first carefully coached him on what to say and how to maneuver to get things done at lodge executive committee meetings. One time, I was particularly proud of gaining some advantage in an executive committee meeting. I don’t even remember what it was.

On the way home from the meeting, my chief taught me an important lesson. When I congratulated him on his performance, he replied that he didn’t feel good about it. While the outcome had been desirable, the method of obtaining it wasn’t. He wasn’t involved to gain power over others or to engage in sly maneuvering. He was involved because he felt the need to serve others. This experience helped change my attitude about politics.

More in the next post.

Friday, September 26, 2008

Well-Intended Tax Policy Helped Cause the Crisis

Plenty of blame has been passed around for the current financial crisis, mainly because there is plenty of blame to pass around and many share that blame. One factor that has not been much discussed is tax law.

GMU economist Russell Roberts in this post explains how a change in tax law created some of the perverse incentives that helped fuel the housing bubble. This piqued my interest, having had a career as a tax man earlier in life.

Years ago when I worked for IRS, people age 55 or older could exclude up to $125,000 capital gains on the sale of their home, provided it had been their primary residence in at least 3 of the preceding 5 years. But you could only do this once in your lifetime.

The way it worked back in those days was that each time you sold your home and bought a new one, you would reduce the basis of your new home by any long-term capital gain on the sale of your old home. There were limits on how much time you had to make the transition, but it worked out for most people. (Oddly, while taxpayers have always had to recognize the capital gain on the sale of their home, they are unable to recognize any capital loss should they sell at a loss.)

Then when you were a senior citizen and sold your home, you would take the lifetime $125,000 exclusion on the long-term capital gain from the sale. This prevented seniors from getting whacked with a big tax bill from simply selling their home because, arguably, the net present value of the capital gain over 30 or 40 years was roughly the rate of inflation. In other words, the home seller really didn’t make any money on the sale when the time value of money was figured in.

Then back during the Clinton/GOP Congress years, lobbyists for the real estate and banking industries were successful in getting Congress to change the exclusion as part of the Taxpayer Relief Act of 1997, which enjoyed broad bipartisan approval. Our nation had become far more mobile, went the argument. There are many people under age 55 that must sell their home for one reason or another and for various reasons are unable to purchase a new home within the legal time limit.

So the law was changed to permit the exclusion if the sold home was your primary (or in some cases even your secondary) residence in 2 of the preceding 5 years. The gain limit was raised to $500,000. The age requirement and the limit on using the exclusion once in a lifetime were dropped. Plus a plethora of “unforeseen events” were specified that allowed the exclusion to be taken even if the 2-year time period was not satisfied.

Here’s where the law of unintended consequences kicked in. This tax law change created a huge incentive for people to turn their homes into speculative investment properties as opposed to low- (or no-) growth savings mechanisms. Instead of having to wait 30 years to get tax-free gains from the sale of a home, you now only had to wait two years.

OK, children, let’s ask this question. If you invest in equities or bonds for two years and sell them at a profit, you’re going to pay 15% federal capital gains tax plus state and local taxes on that profit. If you invest in a house for two years and sell it at a profit, you’re going to pay no taxes on the gain at all. Which investment are you going to choose?

It’s true that our politicians probably felt that the law change would encourage more home ownership, which is viewed as a positive thing. But Chris Farrell at Business Week wrote in 2005 that as a result of the tax inequity, “Money is pouring into concrete foundations rather than high-tech innovation.” Once again, we see an example of how government action created incentives that perversely skewed the marketplace, based on the best of intentions and lots of lobbying money.

It was well known that the home building boom couldn’t go on forever, but many wanted to get as much out of it as they could for as long as they could. Just as a binge drinker knows he will have a hangover in the morning, it was widely known that the housing market would eventually bust. But only the doom-and-gloomers came close to accurately predicting how bad it would be.

The change in the tax law I have discussed was, of course, not the only source of the sub-prime crisis that we are experiencing today. It is just one factor that seems to have been overlooked in most analyses of the problem.

Now, here’s my prediction. You won’t see the Bush administration, the next administration, this Congress, or the next Congress rush to do anything to correct the capital gain tax inequity. Thus, the incentive for behavior harmful to the economy will continue to exist.

Thursday, September 25, 2008

The Bailout: A Pattern Emerges

There are now oodles of articles about the bailout plan, both pro and con. Despite my personal opposition (and that of most Americans per polling), Congress seems poised to pass some form of the bill within the next few days (if not in the next few hours).

Yesterday, the Wall Street Journal editors laid out their support of the general bill, adding a few suggestions about certain details. On the same page, several respected financial big wigs expressed their concerns, but ultimately suggest that it could work if these issues are properly addressed. Even some hard core conservatives are saying that there is apparently no other way to deal with the financial crisis (see NRO article).

While some argue that this plan will actually turn a profit for taxpayers over time, the guys that ran the Resolution Trust Corp and the FDIC during the Savings & Loan bailout point out some realities that nobody else seems to be talking (or even thinking) about. And these guys at least have some experience in managing something similar to this proposed bailout.

Conservative U.S. Senator Jim DeMint (R-SC) has been an outspoken critic of the bailout. While others are warning of a massive recession if we don’t immediately cede great powers to the Treasury, DeMint warns:
“This plan will not only cause our nation to fall off the debt cliff, it could send the value of the dollar into a free-fall as investors around the world question our ability to repay our debts. It's also very likely that this plan will extend the cycle of bailouts, encouraging other companies to behave in reckless ways that create the need for even more bailouts, triggering an endless run on our treasury. This plan may make things look better for Wall Street in the next couple months, but the long-term consequences to our economy could be disastrous.”
DeMint goes on to suggest that there are “much better ways of dealing with this problem than forcing American taxpayers to pay for every asset some investor doesn't want anymore.” He wants a more comprehensive approach that addresses the underlying causes of the problem and institutes “pro-growth reforms.” Besides, he has said that it is ridiculous to entrust the same people that created this mess with cleaning it up. The government simply doesn’t have the capacity to do it, he argues.

The editor of the Myrtle Beach Sun News says DeMint’s plan is “faith-based,” in that no one can say for sure whether it would really work. But he also notes that the Bush plan is also in the same boat. He writes:
“It all comes down to what kind of people we are. Are we Americans semi-shorn sheep, hoping that the gurus can save us from the chaos wrought, at heart, by the foolish belief that housing prices would always rise? Are we content to let the government, in effect, reward bad behavior by sparing us further losses on our home equity and our stock portfolios?

“Or, as DeMint and his cohorts are hoping, are we willing to risk a private-side solution that relies on the increased certainty of profit to draw fresh private money into the financial system? If we're really the democratic-capitalist true believers we say we are (at least when times are good), as he sees it, we should give the markets the tools they need to fix themselves then stand back and watch it happen.”
DeMint isn’t the only voice out there proposing alternatives to the bailout. Even radio financial commentator Dave Ramsey offers a solution. Deroy Murdock writes that “there actually are desirable alternatives to building socialism and saddling every American man, woman, and child with another $2,300 in unjustified federal spending.” He outlines a cogent free-market alternative that some “practicing Reaganites” offer that won’t put the taxpayers deeply in (further) hock.

Despite these voices, I’m not holding my breath waiting for the Beltway crowd to actually pursue any of these avenues. They do not really believe in the free market (other than as a name for big businesses that give them cash in return for policies that create barriers for their competition). They obviously believe in Big Government. And they believe that, despite the unpopularity of the bailout plan, it will help them win their next election.

An anonymous commenter on Frank Staheli’s post about the bailout debacle writes that “the most striking in all this ordeal is not that our government, or our representatives are against their electorate but the ultimate impotence of the same electorate.” To the commenter, this is evidence that we are actually living in a feudal system. Others may look at this and conclude that it is evidence of a republic. (Do average Americans even know enough civics to know the difference?)

Regardless of what I or others that oppose this bailout think should happen, it seems almost certain that we will all be living with the results of the bailout for a long time to come. And I believe that means that the bailout will ultimately cause another crisis down the road a bit due to the law of unintended consequences. But don’t worry. Our political class in that day will swoop in, claiming to be the heroes that can solve that crisis. It’s a self-perpetuating pattern.

Monday, September 22, 2008

Bigger, Faster Legislation Is Not Better

A friend of mine once complained that our form of government is often far too slow in responding to issues. I answered that there are plenty of dictatorships where things get done rapidly.

Our Founders intended for government to be a thoughtful, deliberative process. It has been my observation that, except for a small handful of instances, we create bigger problems when everyone in Washington quickly agrees about major issues and politicians on both sides of the aisle line up to pass legislation Pall Mall.

Now, Congress is poised to pass the Bush Administration’s $700 billion “relief package” (aka bailout) of big Wall Street firms that have taken risky financial positions over the past few years (see AP article). You, the American taxpayer, are about to be put on the hook for more money than you can imagine. In a bizarre accounting action, it probably will even be excluded from the federal budget so that we don’t have to feel so bad about it year after year.

A few (apparently very few) are urging a slower, more deliberative approach. Others (including some that actively helped cause the crisis) are clamoring for stronger oversight than is planned by the administration. They also want caps on the salaries of executives of companies that receive a government bailout. But most Washington insiders expect the legislation to pass this week.

Democracy Lover noted in a comment on this post, “Now the "free market" Republicans (with Democratic assent) have engineered the largest nationalization in human history and created the largest socialist bank ever.” And that was before this latest power grab to assume even more control of U.S. financial markets.

Clinton confidante Lanny Davis writes in today’s Wall Street Journal:
“Now I know what former Sen. Gary Hart meant when he told an audience of wealthy Republican businessmen during his 1984 presidential campaign, "I know why you are conservatives -- you favor private enterprise for the poor and socialism for the rich."”
The knee-jerk reaction to all of this is to increase government regulation. The funny thing is that it was more regulation — brought on as the result of the Savings and Loan crisis in the 80s and 90s — that is at the heart of the current crisis.

The CEI’s John Berlau explains in this WSJ article and this subsequent post that mark-to-market rules have caused otherwise stable banks to write down the value of their mortgage assets. The rules were intended to prevent banks from hiding bad loans, but instead they have caused a wholesale devaluation of loans.

Think about it this way. A poorly cared for home in your neighborhood is foreclosed on and sold for 32% of its normal value. Instead of marginally affecting the general home values in the neighborhood, mark-to-market would essentially dictate that all homes in the neighborhood — including yours — are suddenly worth only 32% of what they were worth the day before the foreclosure sale took place.

Berlau goes on to explain that the proposed $700 billion power grab will not only fail to resolve the problem, but will actually function to make matters worse. It will cause more “fire sales,” causing loan values at even stable banks to be marked down to pennies on the dollar. Berlau suggests that this will not save the economy, but will “build a Big Government that serves Wall Street.”

The lesson is that when both parties line up to pass major legislation, you’d better hold onto your pocketbook. I have felt that divided government might generally prevent these kinds of actions, but we have divided government today and we’re still going to pass this bad deal. So just go back to your daily diversions and ignore the massive KA-CHING you hear coming from inside the Beltway and from Wall Street.

Saturday, September 20, 2008

The Greatest Sin

In the Christian lexicon, pride is the greatest sin. Indeed, it is the root of all other sins. In his book Mere Christianity, C.S. Lewis writes that “it is Pride which has been the chief cause of misery in every nation and every family since the world began.”

What is pride? Lewis writes, “Pride always means enmity — it is enmity. And not only enmity between man and man, but enmity to God.” He says, “Pride gets no pleasure out of having something, only out of having more of it than the next man.”

Lewis explains this in more detail. “We say that people are proud of being rich, or clever, or good-locking, but they are not. They are proud of being richer, or cleverer, or better-looking than others.” He says that pride is unlike yielding to our physical appetites. “It is purely spiritual: consequently it is far more subtle and deadly.”

Humility is the opposite of pride. But it seems that the common understanding of this term differs from its meaning in Christian doctrine. In this respect, humility means properly understanding and respecting our relationship with God and with our fellowmen.

Lewis explains that a truly humble individual would not be smarmy and self-abasing. If you were to meet a truly humble individual, he asserts, “all you will think about him is that he seemed a cheerful, intelligent chap who took a real interest in what you said to him. … He will not be thinking about humility: he will not be thinking about himself at all.”

I’m not sure that I completely agree with Lewis. After all, Christians believe that the most humble person to ever walk the earth was Jesus Christ. He did much that drew attention to himself. Some considered Him arrogant. He certainly had no problem making people feel uncomfortable. What would we think of anyone that went around today saying that he was “meek and lowly of heart,” (Matt. 11:29)? Yet when Jesus did so, we assert that He was merely being honest.

So, perhaps it would be more accurate to say that a truly humble person (according to Christian thought) seeks to do God’s will, regardless of the earthly consequences. We might not consider a truly humble person to be a “cheerful, intelligent chap.” It would depend on the situation.

Lewis cautions about a particular problem for people of faith. It is quite possible for them to be actively religious and yet filled with pride. When we do this, he says, we “are worshiping an imaginary God.” Such people “are really imagining how [God] approves of them and thinks them far better than ordinary people.” Lewis goes on to say:
“Whenever we find that our religious life is making us feel that we are good — above all, that we are better than someone else — I think we may be sure that we are being acted on, not by God, but by the Devil.”
Well, I think that most religious people are hoping that their life is making them good — making them better than what they would be otherwise. But we cross the line when we start to feel superior to others by virtue of our religious life. Indeed, my church teaches that each person is a child of God and that we should love each to the point of desiring the best for them and doing what is in our power to make that happen.

The point of forsaking pride and seeking humility is to arrive at a state where we can come to know God. Lewis writes, “He and you are two things of such a kind that if you really get into any kind of touch with Him you will, in fact, be humble — delightedly humble …. He is trying to make you humble in order to make this moment possible.”

I very much enjoy reading C.S. Lewis’ thoughts on pride in chapter 8 of Book III in Mere Christianity. The entire chapter is worth reading and pondering.

Thursday, September 18, 2008

You Owe the Federal Government $175,000

Despite promises by both major party presidential candidates to cut government waste — a promise that has frequently been repeated by politicians over the years — economist Richard Ebling explains in this Washington Times article that the system is stacked against them. He says that “much like the Energizer bunny, government just keeps growing and growing.”

Ebling’s numbers are quite sobering.
“In the current fiscal year, Washington will spend $2.93 trillion - more than 4 times the amount it spent in 1965 when President Lyndon Johnson's Great Society programs and the Vietnam War helped boost spending to $627.6 billion.

“Meanwhile, the government will take in an estimated $2.5 trillion in taxes in the current fiscal year, roughly $22,100 per household.

“Contrary to popular belief - and campaign rhetoric - the explosive growth of government has occurred under Democratic and Republican administrations alike.”
That’s a $430 billion shortfall this year alone. And Ebling is just talking about the federal government. The numbers jump significantly when you include state and local government spending and taxes.

The truth of the matter is that whenever government controls resources, there is a seemingly endless supply of parties that want some of those resources to benefit them. That is why neither a President Obama nor a President McCain will be able to eliminate the lobbying they suggest they will kill off. Ebling writes:
“In 2007 alone, more than 15,600 registered lobbyists spent more than $2.8 billion to influence federal legislation and tax and spending policy. According to the Center for Responsive Politics, organized labor alone spent more than $44.3 million on lobbying last year; business interests spent nearly double that amount, an estimated $87.2 million.”
(By the way, you can check out the CRP’s site to find out who is lobbying whom, including the federal politicians that represent you.)

GMU economist Don Boudreaux explains the disconnect between government revenue and spending in this blog post. He writes:
“Elected officials make government-spending decisions overwhelmingly in response to political pressures -- the clamoring of this group, the self-serving pleas of that group. It's not terribly difficult for politicians to vote to lavish money on interest groups because, in doing so, no politician spends his or her own money; the money spent comes from faceless others.

“Of course, many of those faceless others do vote, and they generally prefer to pay less in taxes. So passing the bill to future generations is even better politics: mollify interest-groups today and pass the bill to people not yet born.”
Boudreaux’s colleague Walter Williams has said that the concept of passing on debt to future generations isn’t how government overspending really works. He contends that our national debt is only an accounting device that exists on paper. It is actually immediately reflected in the economy, partially via inflation and partially via opportunity loss.

We all pay for government overspending, but the taxation method is obfuscated. We don’t see it, but we pay it in the increased price of every good or service we purchase. We pay it in economic stifling that curtails development of goods and services that never develop or that come to market much later than would otherwise have been the case. None of these costs are included in the $22,100 per household annual federal tax load. Hidden taxation is a politician’s dream.

The Peter G. Peterson Foundation notes that your individual share of the federal burden amounts to $175,000. (Hat tip: David Miller) Multiply that by the number of people in your household to figure out how much your household owes. Do you really receive that level of value from the governmental services you receive? Ebling provides a quote from the late Col. E.C. Harwood. “It follows that if there are men in society who are able to get something for nothing, other men must be getting nothing for something.”

The Peterson Foundation offers this guide that goes a long way toward explaining the actual state of the US Government’s finances. It’s pretty somber stuff. The foundation also offers some suggestions about what we can do to get matters under control. They offer no magic bullet or feel-good solutions. It’s just a series of no-nonsense actions that amount to pretty strong medicine.

The foundation realizes that none of this stuff is going to be politically popular right off the bat, so they plan to spend a billion (private) dollars on a campaign to educate Americans. Their goal is to get citizens to develop the will to demand real fiscal responsibility. That’s a tall order, but one I would like to see succeed.

Today we have two political parties that are bent on expanding government spending at the greatest possible rate. Both claim fiscal responsibility (one perhaps more so than the other) but neither has demonstrated any ability to deliver such. We have developed a political system that works against limited government, and politicians from both parties function well within that system.

The answer is to reduce the amount of resources under government control. But we are going the other direction at such breakneck speed that it seems unlikely that the ship of state will turn around any time soon. Still, that’s the kind of change I would like to see.

Monday, September 15, 2008

A Successful Large Scouting Event, but ...

This past weekend, more than a year of work came to fruition. My Boy Scout district sponsored a large Scouting event at Camp Fife.

Camp Fife is situated in the river bottoms of the Bear River below Cutler Dam. During the summer, Fife is used for Cub Scout camps for boys and Activity Days camps for girls. During the rest of the year, it is used for various Scout training, Scout district camporees, fathers & sons overnighters, winter camping, and youth conferences.

It has been four years since our district sponsored an event this size. It was first sponsored eight years ago, but after running it four years in a row, the event was suspended in favor of smaller events. After everyone had forgotten how difficult it was to run an event on this scale, we decided to run the event again.

Normally, a weekend campout for the Scout district is called a camporee. But for some reason, the lawyers told us that if Cub Scouts were invited, it had to be called a camporall. Whatever. The point is that we invited all Cubs, Scouts, Varsity, and Ventures in the district to attend along with their leaders. The Cubs came up on Saturday morning, while the older boys spent the night.

To make an event this size really work, however, we knew we needed more people than would attend from our own district. We ended up inviting two neighboring districts to join us. Both of those districts added attendees, but only one of the districts added significant volunteer help.

Lining up the volunteers, making sure they are properly trained, and making sure they do their jobs is one of the biggest challenges with running an event this size. We planned over 120 activities, many of them aimed at completing advancement requirements. One leader remarked that this is like having a whole week of Scout camp packed into 24 hours, and that is pretty much correct. There are far more activities than any one boy can do in the time available.

Another major challenge for an event of this nature is getting all of the equipment and supplies together, and getting them distributed to the sites of the various events. If you leave it up to the people running the events, you’re never sure that you’re going to get the stuff there in the right amounts for the right price. You have to have a shrewd procurement person that can work deals and find bargains to make it work. This is a massive task.

The final major challenge is funding and attendance. Since a Scout district has no budget for an event like this, you can’t spend the money until you have some idea of how much money you will get. We try to set the price low so that it is affordable ($7 for overnight campers and $4 for Cubs). If you get much pricier than that, you start to exclude too many potential participants. (We invited some inner city units to attend for free.)

A volunteer developed an online registration system, and we started pushing registration last May. Many volunteers worked to get units signed up. An alternative method would be to simply assess each zone (in our area that generally means an LDS stake) that wishes to participate to pony up a specified amount months in advance and then let the zones worry about registration and collection. You can probably see that such a plan would meet with some resistance.

The event went off spectacularly well, thanks to the providence of good weather and the many dedicated volunteers that came out and helped. We needed BSA certified directors for our waterfront, shooting ranges, zip line, and climbing wall. We offered BB guns and short-range archery for Cubs. We had field archery and a .22 rifle range for Scouts. We had handgun, shotgun, and black powder rifle ranges for the older boys. We only had one run-in with the Sherriff, who asked us to re-orient our black powder range somewhat. We had a certified EMT on duty, but we had no significant injuries among more than 1,500 people present.

Even with how well the event went, I’m not sure we will do it again. We offered many features that directly compete with the organized BSA camp programs. The entire event is almost like a duplication of the council’s Scout-O-Rama/Camp-O-Rama event held in the spring, but they offer some bigger ticket items because they have a real budget for the event. We have found no satisfactory way of delegating tasks so that you don’t have to rely on a handful of heroes to pull off major elements. There just aren’t that many dedicated volunteers in the district that aren’t already busy working with their local units.

It is quite a spectacle to see Scouters of all ages at an event like this. But simpler is not necessarily worse. Holding several smaller, targeted events can also be good in other ways. It will take some time before the district is ready to run an event like this again. And even then, I don’t know if it will happen if I am still in charge of this program. The past few weeks have taken a toll on my health. Most of my vacation this year has been donated to BSA programs.

This is the first year that all four of my sons have been involved in BSA programs at some level. My two older boys worked on the event staff. In some ways they were better than most of the adult volunteers. My two younger boys loved the event. I have spoken with many leaders and youth that have raved about the event. So, there is incentive to hold an event like this again. But the disincentives for doing so also loom large.

Waste of Time and Values

This is really grim. The radio station K-Bull 93 sponsored a texting contest for a high school to win an assembly with singer and tabloid staple Jessica Simpson.

The contest consisted of having students text message “Jessica” followed by their school’s name to the radio station. Two of my sons attend the school that won with 571,795 text messages.

The educational value of this contest is rather dubious. It kind of burns my toast that the school has no problem pulling students out of class to see what my son described as a famous blonde skank, when they won’t excuse a student from PE when he is physically ill.

But even more than that, it boggles my mind that some students at my sons’ school felt that continuously sending text messages to a radio station in the hope of getting a celebrity to visit their school was the best use of their time and resources.

What are we teaching these kids?

Thursday, September 11, 2008

I Cannot Forget

It happened seven years ago today. The world seemed to stop that day. Normal routine was thrown aside as we stared in horrified fascination at the debacle. We saw debris raining from the twin towers. And then we realized that is wasn’t stuff; it was people.

Within a few hours, the lives of thousands of innocents were deliberately snuffed out in an effort to make a political statement. Until that time, most of us could not even conceive the possibility that such unspeakable evil could exist outside of fiction.

We wept. Across the world most mourned with us. Others celebrated.

We felt confusion about how anyone could hate us so fiercely. We felt vulnerable. We felt angry. And we wanted to do something. We donated blood, only to discover later that it was not needed.

Friends, associates, and family members were stuck in airports, as the nation’s air fleet was grounded.

That evening, political leaders of both parties stood on the steps of the Capitol and spontaneously joined in singing, God Bless America.

The world changed that day. For a brief moment, we put aside our differences and realized we were all Americans. The crime rate dropped to all-time lows for a few days. We hung out our flags. Churches held memorial services. And our resolve grew.

Our airports turned into permanent police states. And we determined to stop the evil from hurting us again. In the ensuing seven years, we have sometimes hurt ourselves in this attempt.

This morning on the way to work I listened to the radio, much as I did seven years earlier. As commentators talked about 9/11/01, and played clips of the events of that day, I was surprised at the thoughts and emotions that swelled within me. For a few moments the poignancy of that day was undimmed by the passage of time.

My children have spent much of their lives in a post-9/11 world. Even the oldest is likely too young to remember or to have experienced the national trauma in the way that most adults did. My children don’t understand the sense of innocence lost. I don’t know that I will ever be able to adequately express to them how I felt that day.

I realized this morning that I can never forget 9/11/01. I may push it aside as I deal with everyday life, but I will never forget it. I hope that in our national grappling with that day, we have gained some wisdom in the past seven years.

Tuesday, September 09, 2008

We Can Save You!

In this WSJ op-ed, John McCain and Sarah Palin write, “In the first 100 days of our administration, we will look at every agency and department and expenditure of the federal government and ask this simple question: Is it serving the needs of the taxpayer? If it is not, we will reform it or shut it down, and we will spend money only on what is truly in the interest of the American people.”

Were those words spoken aloud, they would be music to the ears of a fiscal conservative. It’s lovely rhetoric, but it’s not reality. For all the power allotted to the Chief Executive, the position lacks the power to shut down agencies, departments and programs, and redirect budget allocations willy-nilly. After all, the president is not the sole arbiter of “what is truly in the interest of the American people.”

In fact, there are three branches of government and the executive is tasked with fulfilling the directions of the legislature. The Founders envisioned the president as a sort of mundane super clerk rather than an all-powerful tyrant. There is no question that the executive has certain latitude to fulfill the legislature’s instructions, but it would make for an interesting firestorm if the executive were to go about doing as McCain and Palin suggest they will do by the end of April 2009.

The grievance industry would go into overdrive. The ‘evil’ executive would be charged with killing necessary jobs, destroying the environment, making children go hungry, hating minorities, and putting families out on the streets. The media would gobble this stuff up and would spew out the most egregious versions 24x7 in an attempt to sway public opinion.

The MSM increases demand for its products in direct proportion to the amount of controversy they can gin up. This model is similar to use of addictive drugs. Each controversy cycle marginally (or sometimes significantly) dulls the public’s senses so that steadily increasing levels of salaciousness and conflict are required to get the same amount of attention the next time around. In a way, the MSM model is very similar to the model used by drug pushers.

Kevin at y-intercept notes that our political industry functions in a crisis-thrashing model. This goes hand-in-glove with the MSM model. Politicians thrash from crisis to crisis, most of which they themselves create. Not only does this make for great news, it provides regular situations where politicians are able to cast themselves in the hero role. They argue that drastic action is required to avert disaster and that only they can save us.

GMU economist Don Boudreaux writes:
“Washington is no less diligent than is Hollywood at satisfying the public's demand for heroic adventures, epic fantasies, and fairy tales. Each production stars supercilious superstars portraying characters boasting magical powers and godly goodness.

“The only difference between Hollywood and Washington is that, while audiences understand Hollywood's leading men and women to be acting, this same ability to distinguish fantasy from fact disappears when the executive producer is Uncle Sam.”
Some argue that it all comes down to money and that getting money out of politics would resolve the problems. Commenting on this, Boudreaux’s colleague Russell Roberts argues:
“There are two ways to reduce the connection between politicians and money. One is to reduce the role of money. The other is to reduce the role of politicians. I choose the latter. I contend that reducing the role of money of politics in order to make politics more honest is like trying to make airplanes safer by reducing the role of gravity. Let's get money out of politics by making politicians less powerful.”
In reality, none of today’s political movers and shakers has the least intention of reducing the scope of government. They intend to generously spend your tax dollars (and those of your unborn descendants) on what, in their mind (or in the minds of lobbyists that schmooze them) “is truly in the interest of the American people” (or at least in the interest of those that are funding the lobbyists). Few politicians are interested in actually reducing their own power, and the few that actually try to do so are clobbered by their cohorts.

I agree with Roberts that the answer is to reduce the role politics plays in the lives of Americans. What is not clear is how that is to be accomplished. We have been on a binge of increasing that role over the past couple of decades. Perhaps the excesses of big government will eventually cause the pendulum to naturally swing the other direction, as occurred after both the New Deal/WWII/Korean War and Great Society/Vietnam War expansions.

There will certainly be no push for smaller government until a significant portion of the American people gain an appetite for it. So, perhaps the excesses must come first. This bodes ill for what the near future holds, regardless of who sits in the White House.

Monday, September 08, 2008

Buying a Pig In a Poke

Congratulations. As an American taxpayer, you are now the proud owner of two failed mortgage companies whose losses will soon exceed their capital reserves. But don’t worry, because your tax dollars will now prop up the failed institutions and quietly compensate for those losses. Hey, what’s a little more taxpayer debt when you’re already in the hole a few trillion?

Treasury Secretary Hank Paulson waited until the Sunday calm in the weekly news cycle to break the news that he has just nationalized Freddie Mac and Fannie Mae, the two (heretofore) quasi-public/private mortgage lenders. Per this NY Post article, the Bush administration took this action “to avert the potential for major financial turmoil;” a bogeyman that may never have materialized.

Actually, you and your fellow taxpayers only own about 80% of Fred and Fan. The other 20% is retained by investors that made big money for years from the shoddy lending practices of the two mortgage giants. And guess what! These same investors are now preparing to reap market gains from the takeover.

Usually when the government takes over a failing banking institution, common and preferred equity holders lose their investment. That’s how risk functions in the market. While Paulson has stopped these investors from getting dividends, they still retain their equity shares, meaning that they own those shares with minimal risk while still getting paid like they’re higher risk instruments. This is incentive for them to behave in a riskier manner.

Another problem is that debt holders have been fully secured, meaning that they also lose no money. In effect, they get the payoff benefit from high risk without bearing any of the cost. (You’re bearing the cost for them.) This will encourage debt investors to engage in risky behavior. But more importantly, it will also encourage debt holders in other shaky institutions to look to the government to prevent their losses.

The Wall Street Journal calls this model a “perverse mix of private profit and public risk, which [gives Freddy Mac and Fannie Mae] an incentive to make irresponsible mortgage bets with a taxpayer guarantee.” The takeover won’t do much to help current homeowners that have been hurt by years of mismanagement. It will harm future prospective homeowners by making it more difficult to buy a home.

The takeover is not all bad. The WSJ notes that the two firms have been ordered to “stop to their political lobbying.” Most people are unaware of how extensively Fred and Fan lobbied our politicians to look the other way and to give them sweet deals over the past half decade while the looming crisis has been visible for all to see.

It didn’t have to be this way. Reform would have been far less painful at an earlier stage. But the political will to deal with the obvious problems didn’t exist. Someone would have needed to stand up to the powerful politicians as well as industry groups that depend on Fred and Fan for an advantage in the marketplace. This is reminiscent of some other government programs.

Again we see how government meddling distorts the market and ends up hurting those it purports to be helping, while enriching the pockets of a few — all in the name of doing good, and doing so in the name of “the people.”

One observer said that presidents often tend to do things that fly in the face of their party’s positions. No one thought that a Republican would strengthen diplomatic ties with Communist China, but Nixon did. And no one thought that a Democrat would reform welfare along conservative lines, but Clinton did.

Now we have a Republican administration that has nationalized a fair chunk of the mortgage lending market. Both major parties seem bent on moving as much of the private sector into the public sector as possible. I can feel my cynicism rising.

Thursday, September 04, 2008

In the Coliseum

I wrote a comment in a previous post saying that I wasn’t here to defend McCain’s VP selection, Alaska Governor Sarah Palin. And I do mean that. I get the idea that she can defend herself. However, I am not above taking an analytical look at Governor Palin and what she means to this presidential race.

WSJ opinion writer (and former Reagan speechwriter) Peggy Noonan offers her take on the matter in this WSJ article. And it’s not pretty for just about anybody she references. Noonan shows obvious concern that the Left could make mincemeat of Palin, noting how tawdry the response has already been. Noonan offers a heavy dose of advice for the media. I think it’s good advice, but I also think that nobody in the media will give one hoot in a holler about it.

Noonan makes an insightful comment, variations of which I have heard from a fairly wide variety of conservative sources. She says that conservatives know that Palin is really one of them. They “can smell this sort of thing,” writes Noonan, and they “will fight to the death for one of their beleaguered own….”

Normally a VP candidate makes very little difference in a presidential race. Americans tend to focus on the #1 position. Most aren’t going to be persuaded to vote for or against the top dog based on the choice of a running mate. I sense that the formulation may be somewhat different with respect to Palin.

McCain has made a reputation of sticking his finger in the eye of conservatives. Some have argued that this is more a matter of style than of substance, but you won’t hear that from solid conservatives. Most self-described conservatives have felt quite disheartened about the current presidential race. When it became clear that McCain was going to cinch the GOP nomination, many felt that they no longer had a dog in the fight. Most conservatives that have been supporting McCain have been doing so either half-heartedly or through gritted teeth.

But McCain has infused the conservative base with new energy by selecting Governor Palin as his running mate. She faces all of the same questions about foreign policy inexperience that all governors running for pres or VP have faced in the past half century. (And that Obama also faces.) But more importantly, the tack of the Left has been to attack Palin for being less than perfect in living up to the Left’s interpretation of conservative family values.

Noonan is correct when she asserts that this latter line of attack will fail and will probably even cause a backlash. The issues the Left has been serving up tabloid style make Palin seem more normal — more like everyday middle American voters. Noonan writes, “It is the left that is about to go crazy with Puritan judgments; it is the right that is about to show what mellow looks like.”

Over the past few days I have seen the following kind of exchange occur frequently between Utah conservatives. “I’m sorry that Romney was not picked, but I’m really excited about Palin.” I chuckle when I hear this. Romney would have added no votes that McCain would not otherwise have gotten. He may have even pulled votes away. Despite Romney’s fundraising and stumping, McCain had no real reason to pick him.

At any rate, Romney is now free to campaign for the next four years. He’s in a similar position to Hillary Clinton, having to appear to be working hard for the party’s nominee while knowing that his/her own position will be improved if that nominee loses in November.

I sense that, unlike Romney, Palin will actually add votes for McCain without costing him any votes. I doubt many (if any) of those added votes will come from Democrats that already favor Obama. But many voters that lean conservative and that were going to sit this election out will now pull the lever for the McCain-Palin ticket. The question is whether enough of this enthusiasm will occur in battleground states to make a difference.

Mind you, I’m trying to offer a dispassionate analysis here. I’m still open on forming a personal opinion about Palin. I’m content to wait and see how things work out.

With all of that said, Noonan’s final paragraph is a chilling reminder of what the world politics is like. It’s even more chilling coming from someone that has lived in the vortex of the system.

“Palin's friends should be less immediately worried about what the Obama campaign will do to her than what the McCain campaign will do. This is a woman who's tough enough to work her way up and through, and to say yes to a historic opportunity, but she will know little of, or rather have little experience in, the mischief inherent in national Republican politics. She will be mobbed up in the McCain campaign by people who care first about McCain and second about themselves. (Or, let's be honest, often themselves first and then McCain.) Palin will never be higher than number three in their daily considerations. They won't have enough interest in protecting her, advancing her, helping her play to her strengths, helping her kick away from danger. And – there is no nice way to say this, even though at this point I shouldn't worry about nice – some of them are that worst sort of aide, dim and insensitive past or present lobbyists with high self-confidence. She'll be a thing to them; they'll see the smile and the chignon and the glasses and think she's Truvi from Steel Magnolias. They'll run right over her, not because they're strong but because they're stupid. The McCain campaign better get straight on this. He should step in, knock heads, scare his own people and get Palin the help and high-level staff all but the most seasoned vice presidential candidates require.”
It makes one wonder what will become of Palin should McCain win. Would four or eight years inside of the beltway make her one of “them?”

Honest Democrats know that Noonan’s criticism applies just as well to their own party as it does to the GOP. This is the way Washington, DC works. It is the nature of the political class. Please think about that next time you want a political solution to any problem, whatever it may be.

Also, the next time you are dissatisfied with your choice of candidates for political office, think about Governor Palin. I’m not implying victim status, but think about the horrendous battering that she and her family will endure between now and November both from the Left and from the family’s ‘friends’ in the campaign. And then ask yourself how many better qualified Americans are willing to go through that kind of thing for a political position. Then you’ll know why your ballot choices seem deficient.

Tuesday, September 02, 2008

Striped Candy for the Children

A few years ago I developed an appreciation for Creme Savers, a Wrigley product that is a spinoff of its popular LifeSavers brand. The Creme Savers line of hard candies was launched 10 years ago as a swirled mixture of a fruit flavor along with a dairy cream flavor.

Creme Savers never impressed me much until they came out with a chocolate and caramel flavor. It substitutes chocolate for the fruit flavor and caramel for the the traditional cream flavor. For those that like that kind of thing, it’s a very pleasant little candy.

But I’m kind of a health nut, so I don’t eat much candy. I’m not a purist as I was when I first began my health kick 20 years ago. (Frankly, I was a bit fanatical about it, which made me a major pain in the tail to friends and family, who graciously put up with my antics.) So two or three times a week, I will pop a Creme Saver into my mouth.

A few years ago I started carrying a few pieces of the hard candy in the pocket of my suit coat to be used for refreshment during the long Sundays when I was serving in the ward bishopric. Eventually my two youngest children discovered this trove in my pocket. Now our Sunday church meetings never pass without my two youngest coming up with beatific countenances, asking for a “striped candy.”

I never eat from my pocketed stash of Creme Savers any more. Instead, every Sunday morning I make sure to put four or five of the delicious hard candies into my pocket in anticipation of presenting them to my little children. My young ones are usually persistent enough throughout the three-hour block to clean me out.

A couple of years ago all of our local grocery stores quit stocking the chocolate and caramel flavor. I figured that my kids would accept Werther’s caramel hard candy as a substitute. But I soon discovered that this was simply inadequate. I ended up buying a box of 12 packages of my children’s desired candy from

My five-year-old daughter has discovered that I will reward good behavior at home with one of her favorite striped candies. This has become almost a daily routine for her. When I give in to her pleas, she has developed this ritual where she lays with her back on the bed with her head hanging over the edge of the mattress. She then has me unwrap the tasty treat and pop it into her upside down mouth. I still don’t know where she got that idea.

Geez. What a dad won’t do for his kids.